Why Television Is Dead
By Steven Rosenbaum, www.forbes.com
View Original
January 28th, 2014
If you want to know where video is going, just take a page out of Deep Throat’s handbook in “All The President’s Men”… follow the money.
In 1976, the first basic cable network was launched, Ted Turner’s Atlanta-based WTCG – later renamed Superstation TBS. What followed was a raft of basic networks aimed to provide better programing to households hungry for more choice. Networks like C-Span, CNN, Nickelodeon, continued through the 80′s with the launch of MTV MTV, ESPN ESPN, USA, BET, A&E and others all sprouted up. No doubt the growth of basic cable was in part prompted by cable system owners who wanted to insure that their local monopolies delivered more than over-the air stations and pay cable networks like HBO. But the silent partner in the growth of basic cable was Madison Avenue advertising agency buyers and national brand advertisers.
Why? Because broadcast television was a powerful advertising medium that had cornered the market on the scarce and valuable television market. Advertisers wanted to foster competition, and so they overlooked cable TV’s relatively paltry audiences and supported the growth of a much more diverse and competitive television market.
Advertisers and agencies voted with their dollars to fund the growth of new audiences and networks.
Today – that money is providing the same early incentives to drive an expanding market in web video. In the past two years, the number of creators and distributors of original web program has exploded.
While YouTube has funded joint-ventures with more than a quarter of a billion dollars in production dollars, they’re no longer the only game in town for web originals. Rapidly growing in stature and notoriety are AOL AOL, Yahoo, Conde Nast, Alloy, MyDamnChannel, Wochit, and Scripps.
As Erika Morphy wrote in Forbes – “Mindshare’s chief strategy officer for North America Jordan Bitterman in an interview with AdExchange, explained: Q: Regarding TV dollars moving online, and in particular, into online video advertising, how do you see that evolving?
A: Online video dollars had been coming from online budgets until about a year ago. Initially, marketers were saying, ‘I’m not willing to move my dollars out of television. This is not a proven medium for me. Therefore, I’m [only] willing to move my online dollars – some of which I know exactly what I’m getting when I spend it, just like I do on television. Some of it I don’t necessarily know what I’m getting for it, or it’s experimental, or I’m doing it for objectives that might be secondary or tertiary – I’ll play around with those dollars.’.”
The jump we’re about to experience, from 2013 to 2014 media dollars represents mainstream media buyers pointing a firehose of new money at the emerging web video creation market. In 2013, 20 brands. Competitrack’s Online Video Ad Tracking service reported, spent more than $10 million.
The process of buying video ads has become increasingly complex, with more websites, ad networks, exchanges, and demand-side platforms (DSPs) than ever before, according to a new eMarketer report, “Buying Online Video Advertising: Making the Most of Your Budget.” But buying online video ad space is, at its core, similar to buying traditional TV advertising. For advertisers, it starts with knowing how to reach their target audience mixed with a good grasp of brand objectives and how they shift at different stages.
What’s at stake here is money—a lot of money. And the total is growing rapidly. Estimates from eMarketer indicate that US digital video ad spending will nearly double in only four years, climbing from $4.14 billion this year to $8.04 billion in 2016.
eMarketer reports that 2014 is on target to hit $5.7 billion, an almost 40% increase over 2013. Estimates from eMarketer indicate that US digital video ad spending will nearly double in only four years, climbing from $4.14 billion in 2013 to $8.04 billion in 2016.The result? The industry formerly known as TV, is rapidly turning into T/V (Television / Video). As David Matathia, director of marketing communications at Hyundai Motor America told eMarketer, “We’re pretty much approaching all of our major broadcast partnerships in concert with our digital programs.” He said, “When we’re working with network partners, it’s now rare to see a standalone TV or a standalone digital deal. It’s almost become standard practice to package digital and broadcast together.”
So this is the year.
The year that the keepers of the budgets push past the concerns about immediate returns and drive to build a sustainable content creation ecosystem. Dollars drive production. Production drives audience. Devices encourage a new consumer experience. 2014 is the year that the web emerges as the new audience consumption platform for video, and moves to eclips TV.
Sometimes it pays to be a student of history.
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